Medicare’s error rate for payments to hospitals, doctors and other service providers has spiraled upward from 10.1 percent to 12.7 percent in one year, according to a government watchdog.
The payments, known as Fee-for-Service, are the heart of the Medicare program — and they involve tens of billions of federal dollars.
“One program, Medicare Fee-for-Service, reported an error rate of over 10 percent,” said the Department of Health and Human Services’ inspector general. “Two other programs, Medicaid and Foster Care, also reported error rates that increased from the error rates reported” last year.
In its response to the agency’s 2014 audited financial statement, the IG noted that the high error rates for Medicare, Medicaid and Foster Care are violations of the Improper Payments Information Act of 2002.
A chart buried on page 165 of the report, however, put the actual error rate at 12.7 percent, considerably higher than the IG’s diplomatic “more than 10 percent” observation.
The same chart said improper payments for Medicare Fee-for-Service in 2014 exceeded $45 billion.
The total costs for improper payments under seven HHS benefit payment programs, not including TANF, came to $78 billion, compared to 65.3 billion in 2013, according to the chart. That’s an increase of approximately 20 percent in one year.
The Fee-for-Service program encompasses “hospital insurance (Part A) and supplementary medical insurance (Part B) to eligible citizens,” according to HHS.
“Part A is provided to persons 65 and over who qualify for Social Security benefits and pays for hospital, skilled nursing facility, home health, and hospice care. Part B is optional coverage that pays for physician, outpatient hospital, home health, laboratory tests, durable medical equipment, designated therapy, outpatient prescription drugs, and other services not covered by Part A.”
The government paid nearly $350 billion for the more than 1 billion Fee-for-Service claims HHS processes each year, according to HHS.
The improper payments law is administered by the Office of Management and Budget and regulates how federal departments and agencies account for payments made to individuals under programs like Social Security and Medicare.
The HHS projected last year that its Medicare Fee-for-Service error rate would increase from 8.5 percent in 2012 to 10.1 percent in 2013, then drop to 9.9 percent for 2014. The department had set an 8.3 percent error rate as its goal for 2013.
Mark Tapscott is executive editor of the Washington Examiner.
